Study On Wage Difference Between Urban And Rural Areas In China’s Labor Market

Achieving common prosperity for the whole country in 2015 is the goal put forward by our Party at the Fifth Plenary Session of the 19 th Central Committee and a new direction for narrowing the wage gap among residents.Reducing the wage differential among residents is therefore an important issue to be addressed in China,of which the large wage differential between urban and rural residents is an important manifestation of the imbalance in residents’ wage income.Since there is no fundamental reform of the household registration system in China,in the labour market,rural workers are paid differently from urban workers for doing exactly the same work,so it means there is discrimination against rural workers in the labour market.Many scholars have conducted research on this issue.By studying through the relevant literature,we find that most scholars have conducted research from the perspective of average wages.Based on this,this paper uses data from the 2017 China General Social Survey and firstly compares the semi-parametric quantile regression model with the linear quantile regression model to conclude that the semi-parametric quantile model is more suitable for the study of urban-rural wage differentials from the perspectives of goodness of fit and non-parametric effects,as it can better reflect the relationship between variables and wages on the one hand,and the change in the impact of variables on wages at different wage levels on the other.The semi-parametric quantile regression was then used to model wages in urban and rural areas respectively,and it was concluded that the degree of influence of each variable on wages in urban and rural areas was different at different wage levels;finally,the counterfactual factor decomposition method was used to decompose the urban-rural wage differentials,and it found the changes in urban-rural wage differentials at different wage levels across the country and the three regions,as well as the causes of wage differentials at each wage level,and also the model compared the three regions.The empirical study found that:（1）there is non-parametric effects between the two variables of years of work and years of education and wages;（2）urban-rural wage differential exists in China’s labour market,and the size of the wage differential varies at different wage levels: nationally,the differential between urban and rural wages shows larger at low wage levels,and at high wage levels,the differential is smaller;regionally,in the eastern and central regions,the wage differential between urban and rural areas tends to decrease and then increase as the wage level rises,while in the western region,the wage differential between urban and rural areas tends to decrease as the wage level rises;（3）The wage differential caused by household registration discrimination accounts for about 50%of the total urban-rural wage differential,and when comparing the three regions,the phenomenon of household registration discrimination is most serious in Western region.Finally,based on the results of descriptive statistical analysis,regression model building and counterfactual decomposition,the thesis is summarised and the following three suggestions are made to address the issue of how to narrow the urban-rural wage gap:（1）Enhance education investment and vocational skills training to improve the personal characteristics of rural workers.（2）Improving the structure of the labour market and removing barriers to the occupational entry of rural workers.（3）Deepen the reform of the household registration system and remove household registration discrimination.